Foreign investment boosts local economy, but too much can harm growth
The study looked at how foreign investment impacts the quality of economic growth in different regions of China. They found that technology transfer from foreign companies has a positive effect on local economic growth. However, the overall impact of foreign investment on economic growth is mostly negative, except in areas with high levels of foreign investment. In those areas, the level of foreign investment can have a positive effect when it aligns with technology transfer. Factors like technological differences, the concentration of foreign investment, and the ratio of value added also play a role in how foreign investment affects economic growth.